How Advisors Are Future-Proofing Their Businesses

Of these, 85% of advisors globally and 96% in the United States focus on the 50-to-59 age group, and another 61% globally and 88% in the United States look for clients ages 60 to 65. 

Managing Investments and Risks

Advisors need to continually manage portfolios through exuberance and turbulence. Over the past five years, they have mastered the art of recalibration as markets delivered swift downturns and record highs, inflation spiked and interest rates skyrocketed from near zero to 5% or more.

This year, they have had the added challenge of navigating contentious elections globally — not least those in the United Kingdom and France and in November in the United States. In the short term, 72% say that fundamentals are more important than elections. In the long term, they think that policy will ultimately matter, as 64% rank public debt as a top economic risk.

Advisors say they may also have to strategize around are many other risks, including:

Expansion of wars: 62% Persistent inflation: 61% U.S.-China relations: 61% High-for-longer rates: 56% China economy: 47% Climate risk: 38% AI disruption of job market: 35%

Serving Clients

Advisors spend 43% of their time meeting with or managing clients but still have more to do. In the long term, they need to address growing client demand for financial planning services, which 57% believe differentiates their practice.

In the short term, advisors have to keep clients invested and help them avoid their biggest investor mistake: timing the market, cited by 42% of advisors.

Thirty-two percent of advisors also think that clients need to be aware of the risk of keeping too much cash on the sidelines.

Here’s what advisors are discussing with clients to get them reinvested so they can meet long-term funding goals: 

Risk of missing out on market performance: 52% Their risk capacity: 48% Need for growth so they don’t outlive their assets: 47% Cash is not risk free: 45%

Moving to Model Portfolios

In the long term, 50% of advisors say that transitioning more clients to model portfolios will help free the time they need to deliver financial planning and other services. Consistency may be the greatest investment benefit they derive from model portfolios, according to Natixis.

In the short term, advisors are turning to private investments for differentiated returns, but 65% say it’s difficult to build a portfolio of private assets at scale.

Advisors have a range of strategies for how they move their business to model portfolios. Here are the ones they consider best for implementing models:

Case-by-case approach based on client willingness: 50% Phase approach with goal of converting entire client base over time: 47% Comprehensive approach to convert entire client base quickly: 42% Focus on new clients: 39% Focus on retirement drawdown clients: 34% Focus on lower-balance clients: 32% Focus on retirement rollovers (U.S. specific): 30% Focus on younger clients: 24%